It is nearly two years since Derek Lomas, then a graduate student on an internship with the communications giant Qualcomm, stumbled across a unexpected find while browsing a Bangalore market stall. Perusing the vast spread of goods, he was drawn to an array of strangely familiar computers.

The boxes were emblazoned with slogans such as "EDUCATION COMPUTER" and "LEARN COMPUTERS THE FUN WAY", and generally contained a mouse, a couple of joysticks and a combined computer-keyboard that featured a built-in slot for game cartridges. On closer inspection he discovered that the machines were, in fact, modelled on the early generations of 8-bit computers – pioneering home PCs such as the Apple II, BBC Micro and Nintendo Entertainment System.

For somebody brought up on these early machines, the find was a revelation … but the biggest surprise was the price: the entire set came in for $12 (around £7.50).

Excited by the possibility of an extremely low-cost computer that was being bought across countries including India, China and Brazil, Lomas returned to the US and joined up with his colleagues at the University of California, San Diego, to start playpower.org – an effort to jump on the bandwagon and provide software that can turn one of these machines from a simple entertainment device into something more useful.

Get with the programme

In the same way that millions of programmers were forged through early experiments with the BBC Micro or Commodore 64, PlayPower wants to see the same thing take place elsewhere.

"Even some basic computer skills such as touch-typing can be economically transformative – making the difference between making a dollar a day as an urban labourer, or a dollar an hour as a back-office worker," says Lomas, who is now a researcher at Carnegie Mellon University in Pennsylvania.

"So what we're trying to do is to obtain some of this 'abandonware' – 8-bit software that was produced in the 80s for education in England and America – and import it to this existing $12 dollar computer."

It may seem crazy or even illegal that such machines can be sold so cheaply, but the situation has come about because the underlying patents have expired. With the chip designs in effect in the public domain, and western companies finding little use for them, manufacturers in China are able to copy, produce and sell these proto-PCs at very low cost.

The result is that thousands (or even millions) of children worldwide are using these computers – and although it is 25-year-old technology that pales in comparison to today's powerful PCs, that is a substantial new market for anybody. Lomas says that the manufacturers cannot afford to make their own games – but they are eager to include any software that helps them sell more units.

"They recognise that having an educational impact is important for selling their product, but that's about as far as their engagement goes," he says. "They don't have the margins to invest in research and development of effective learning games, but they are interested in them."

"When we contacted some of these manufacturers, one question we had was whether we had any content in Arabic because they're getting a lot of Middle Eastern buyers. So we might be able to provide them with some learning games for the different regions they sell to."

PlayPower has formed a substantial open source community of hackers, coders and enthusiasts who want to help, and is looking to resurrect some of the popular 80s software left behind by its developers. It's also looking to build new software platforms that will help build in their own language, for local users.

But bringing educational computing to the developing world is not a new idea – and it has not always been entirely successful in the past.

Most notably, the One Laptop per Child scheme – the so-called "$100 laptop" – has found it tough to deliver its pioneering machines to its target audience. Recently, the project made a group to provide computers for every student in Uruguay, but after years of deal-making and political machinations, it is still only making relatively slow progress.

In fact, despite opposing viewpoints on the best way to achieve similar goals, he doesn't think that OLPC and PlayPower are competing. Instead of reinventing the wheel, says Lomas, he is simply trying to use the self-interest of existing manufacturers to achieve wider benefits.

"I don't think that there's much tension," he suggests. "The heart of what we're doing is content. We're not trying to develop new hardware, new systems, new distribution channels; we're trying to make use of existing manufacturing and existing distribution networks and we're just trying to acquire and develop good content."

Play goes Pop!

PlayPower's proposals have been put to a number of conferences and organisations – including last week at the annual Pop!Tech conference in the US, where several hundred luminaries across science, technology and the arts gathered to hear new ideas. The result has been a blossoming of the community, and excitement about the possibilities.

Still, isn't there something problematic (or even patronising) about giving children hand-me-downs that are a quarter of a century old – especially as technology has moved so fast? Many countries want to use technology to leapfrog the development process – and it's arguable that teaching computer skills on 8-bit machines simply builds a new generation of employees for voracious multinationals, rather than a wave of home-grown entrepreneurs.

"It's a very legitimate argument," says Lomas, with a little sigh. "We're not forcing people to buy these machines – they're already buying them."

A little market intervention on the side of education never did anyone any harm, he suggests – and as well as potentially providing the difference between a good job and subsistence, PlayPower also realises the difference between learning to use computers in general and learning to use very specific technologies. That is why the project is not limiting itself to this current generation of 8-bit computers, but also looking to the future generations of very low-cost PCs and mobiles that will become available as those systems also fall into the public domain.

"Tools become obsolete in a way that content doesn't," he says. "Mario Bros is not obsolete because there's a new version – you play the first one and it's still really fun.

"That's the incredible thing about this cultural exchange that's taking place: the kids in the slums of Dharavi in Bombay all know about Mario because it's one of the few pieces of digital culture that they're able to afford. And we can look at that and say: 'It's piracy'. We can look at that and say: 'Oh, they're so far behind'. Or we can look at that and smile, and be happy that these pieces of our culture that we've discarded – by and large – still have so much value.

"Even for our children, I'd imagine, we'd be pretty happy if our kids were playing some of the 8-bit games we grew up with."